OT: Dow Plummets More Than 500 Points...YIKES!

[S2M]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

Retirement accounts are insured to $250K.

Yes......I was referring to accounts other than....sorry for the confusion..

Well slap me with a studded whip, and call me slave......

[Michigan Girl]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

Retirement accounts are insured to $250K.

Yes......I was referring to accounts other than....sorry for the confusion..

Well slap me with a studded whip, and call me slave......

If you read x-factor....he had already stated other than retirement accounts I was going with it......

[Just Mindy]

Frank...from what I read Lehman severely overextended itself on investments. Is it because they showed more realized income on the books giving them more to play with, or was it just shitty investment decisions? I'm very curious about this...I used to work as an accountant in mutual funds but haven't kept up with things since the kids came along. I don't understand why FASB changed this...

I'm not arguing that these companies didn't act prudently with their investments. From my reading, it seems that what's killing these companies is their investments in Credit Default Swaps.....reportedly, AIG has the hugest cache of them out of anyone, which is why I think...if they go down, the fit's *really* going to hit the shan. I can't even remotely suggest I know enough about CDS's to even feel comfortable discussing them....but the sad thing, is 99.99999% of the people out there are in the same boat as I.

If I recall, I did say that SFAS157 was part of the problem, perhaps I need to clarify that it might not be the whole reason....but I feel it's a significant chain in the spokes right now, as valuation seems to be the big underlying problem. No one knows how to value these assets (because the basis for valuing them in a completely frozen market seems to be to value them at zero)...

Now there's an argument that can be made that what I've said regarding sfas157 isn't valid, because that suggests it's only a paper loss....but I think some underlying bad decissions were made regarding mortgage securities and CDS's....and that SFAS157 seems to be magnifying the problem significantly (and driving the market into a near illiquid state)

I wish I could tell you why the FASB released this. I actually had a discussion last week with a Phd in accounting regarding this, and he's still shaking his head....partly pressures to converge with IFRS, partly pressures from the mortgage industry looking to reap larger profits when things were good in the mortgage industry, partly because of the increased focus on trying to value IP in a way that is more relevant. But really...I wish could sound off more authoritatively on this aspect...I cant, beyond what I said already.

Thanks Frank...I think both the FASB and SEC need to do some thinking in the very near future. I looked up CDS's on Wikipedia and this was the only thing I understood about them:

Warren Buffett famously described derivatives bought speculatively as "financial weapons of mass destruction."

[RossValoryRocks]

Dow up 1.3% today...I expect to see most of the drop erased over the next couple of weeks...

It's a good time to buy some over sold stocks and make a little money...

GOD I LOVE CAPITALISM!

[strangegrey]

Warren Buffett famously described derivatives bought speculatively as "financial weapons of mass destruction."

LOL! Gotta love it!

[jrnychick]

Sorry I couldn't continue with the discussion this morning. Not that any of you care, but I had to go to work. When it comes to people with more than $100k in a checking or savings account (not a retirement account), I have heard many news stories about people who have all of their retirement money in one regular checking or savings account. I also think about the people who may have recently received an inheritance, and they dump the money into a savings account until they decide what to do with it. I would love to think that everyone in the US is educated enough to know that the FDIC insures regular accounts only up to $100k, but that's just not true. Although I don't have that kind of money just laying around, I have much more than that in a variety of investments. I've learned not to rely on my 401k for retirement. My husband and I were both self-employed for several years, so there was no 401k anyways.

This was sadly funny...
I'm in the process of deciding where to put my 401k contributions for my new job. We were looking at the various fund options, and one of the "safe" funds was heavily invested in Freddie Mac. Now that Freddie and Fannie are penny stocks, I'm glad I didn't put my money in that fund a year ago! Of course, I still have time for things to rebound so I wouldn't be to worried if I did have my money in that fund. I feel very sorry for the people who are close to retirement who put their money in that fund.

My husband and I really aren't too worried, but my husband said he did lose a bit of sleep last night about our investments. He spends A LOT of time studying the markets and has been extremely successful with our investment dollars. He also manages his mom's investments and has more than doubled her portfolio.

[slucero]

Dow up 1.3% today...I expect to see most of the drop erased over the next couple of weeks...

It's a good time to buy some over sold stocks and make a little money...

GOD I LOVE CAPITALISM!

Wa Mu is next in line for a bailout.... AIG getting bailout out will be a memory just like Bear Stearns already is...

This mess didn't start because of garbage loans on the books. It started because through securitization, they were able to get the loans OFF the books. Even that wasn't too bad, because there was pretty effective scrutiny of what was being offloaded. Then along came Wall Street, who started packaging good loans along with higher risk subprimes, and then created complex derivatives based on this. Everyone is watching the stock market, but its the derivatives market that's also at risk... and the derivatives market DWARFS the securities market....

These securities were then marketed all over the world.

Once banks realized that they could get rid of their junk loans, it was open season. Add to that mix, the housing boom, escalating house prices, missing in action regulators, massive bonuses for the bankers for moving the product, and it was as if the bankers had discovered crack cocaine. They became addicted to using it, and dealing it. Did I mention that the regulators were missing in action ?

This is just beginning... its been DECADES in making...

market is already -200

[RossValoryRocks]

market is already -200

Good...more buying opportunities! BUY LOW SELL HIGH!

[Ehwmatt]

Kind of insulting, don't you think? If my "grandma" had $150k in one account, I would be a pretty bad grandchild if I didn't call her up and suggest that she move $50k to another bank. Regardless of the state of the economy, I think you're an idiot if you have more than $100k in any one bank account. How's that for insulting?

Not insulting at all - I agree. No one should be dumb enough to leave more than 100 in any account. Just makin light of the situation, no hard feelings.

[Enigma869]

Dow plummets another 450 points today! Had to see this one coming!

http://money.cnn.com/?cnn=yes


John from Boston

[strangegrey]

yeah, allthough I tend to agree with Stu on these things, I can't agree with his optimism. I really think shit's going to be rough for a while...

[slucero]

market is already -200

Good...more buying opportunities! BUY LOW SELL HIGH!

Washington Mutual just put itself up for auction.....

450 decline today....


anybody buying in this is gambling.... even the talking heads on CNBC are saying "stay out"

[Enigma869]

yeah, allthough I tend to agree with Stu on these things, I can't agree with his optimism. I really think shit's going to be rough for a while...

Stu would be optimistic if our entire country was burning to the ground! He sounds like John McCain talking about how "sound the fundamentals of our economy are". That comment alone, should prevent McCain from getting elected! This is the least "sound" economy of my lifetime! Every time I tell myself that things can't get worse, they do!


John from Boston

[Rick]

yeah, allthough I tend to agree with Stu on these things, I can't agree with his optimism. I really think shit's going to be rough for a while...

Stu would be optimistic if our entire country was burning to the ground! He sounds like John McCain talking about how "sound the fundamentals of our economy is". That comment alone should prevent McCain for getting elected! This is the least "sound" economy of my lifetime! Every time I tell myself that things can't get worse, they do!


John from Boston

Stop telling yourself that then!

[7 Wishes]

Dow up 1.3% today...I expect to see most of the drop erased over the next couple of weeks...

It's a good time to buy some over sold stocks and make a little money...

GOD I LOVE CAPITALISM!

Nice twist. The guy YOU helped put into office is now, officially, the worst President of all time - having surpassed even Hoover in incompetence.

I LOVE how you guys will say ANYTHING to help the ends justify the means.

If you honestly think Americans - who already overwhelmingly believed (rightly) that Obama is better equipped to handle the economy - are going to flock to the other side of the aisle now (especially now that Palin fever has died down), you are deceiving yourself. It's OVER for Republicans this election cycle.

[RossValoryRocks]

Dow up 1.3% today...I expect to see most of the drop erased over the next couple of weeks...

It's a good time to buy some over sold stocks and make a little money...

GOD I LOVE CAPITALISM!

Nice twist. The guy YOU helped put into office is now, officially, the worst President of all time - having surpassed even Hoover in incompetence.

I LOVE how you guys will say ANYTHING to help the ends justify the means.

If you honestly think Americans - who already overwhelmingly believed (rightly) that Obama is better equipped to handle the economy - are going to flock to the other side of the aisle now (especially now that Palin fever has died down), you are deceiving yourself. It's OVER for Republicans this election cycle.

Uhhh...better check again...I will go look for it...but they trust McCain more than Obama on the economy.

Not to mention the problem was caused by CLINTON and the stupid Republicans. http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

That is what caused this mess...Not George Bush. Also go look and see all the experts are saying that Freddie and Fanny are the root cause of all of this...and the THREE biggest takers of money from Freddie and Fanny in the last 20 years are all Democrats...and Barrack Obama in ONLY two years as a Senator is one of them.

There is a TON of stuff you can blame the President for...but not this one.

Nice try though.

[Lula]

gramm.... gramm.... oh yeah, he called the american people whiners, co-chair of mccain's campaign, and a lobbyist!!!

things suck for me. interest rates on my car loan and some student loans are ridiculous. tried to refinance, but surprise! not happening. i'm living paycheck to paycheck right now. should've bought a house when anyone could get financed and them maybe i too could have the american tax payers bail my ass out. clinton holds some responsibility absolutely. i do think deregulation (gramm) has been significant in this mess.

[RossValoryRocks]

gramm.... gramm.... oh yeah, he called the american people whiners, co-chair of mccain's campaign, and a lobbyist!!!

things suck for me. interest rates on my car loan and some student loans are ridiculous. tried to refinance, but surprise! not happening. i'm living paycheck to paycheck right now. should've bought a house when anyone could get financed and them maybe i too could have the american tax payers bail my ass out. clinton holds some responsibility absolutely. i do think deregulation (gramm) has been significant in this mess.

OH agreed...Gramm has as far as I know been quietly pushed aside...but he does have a PhD. in Economics...which just goes to prove no one knows anything.

Also...that was ALMOST 10 years ago...I don't think anyone foresaw what could happen when Freddie and Fanny management went off the deep end 6 years later (Run by Clinton appointees BTW, one of whom is Barrack Obama's chief economic adivsor BTW).

IF you REALLY want to play the "Who fucked up more" game I am in...but it's a 50/50 TIE. Because they are ALL Politicians...and they all stink...this election is mostly about who stinks the least.

[RossValoryRocks]

gramm.... gramm.... oh yeah, he called the american people whiners, co-chair of mccain's campaign, and a lobbyist!!!

things suck for me. interest rates on my car loan and some student loans are ridiculous. tried to refinance, but surprise! not happening. i'm living paycheck to paycheck right now. should've bought a house when anyone could get financed and them maybe i too could have the american tax payers bail my ass out. clinton holds some responsibility absolutely. i do think deregulation (gramm) has been significant in this mess.

And Lu...you don't have to answer this...but it is a salient point...how much personal responsibility do you have for the car loan and student loan rates??? I know how being stupid can mess up your credit, I did it and suffered for it. Not saying that you did, but high interest rates are usually the result of poor credit and poor credit is usually a symptom of poor credit managment.

[Lula]

lol, stu!!

first i'm not going toe to toe with ya . as for my credit, when i bought my car almost 2 yrs ago i had no credit and very little down. as for my loans.... consolidation at a decent rate for my gov loans, but a private one to finish my master. my mistake was choosing a private college and going into education! it could absolutely be worse, but lowering my car payment will help a bit. didn't plan on getting knocked up, had i known i was pregnant when i was in the process of buying my car, i may have done differently. i'm looking into transferring to a credit union.

[RossValoryRocks]

lol, stu!!

first i'm not going toe to toe with ya . as for my credit, when i bought my car almost 2 yrs ago i had no credit and very little down. as for my loans.... consolidation at a decent rate for my gov loans, but a private one to finish my master. my mistake was choosing a private college and going into education! it could absolutely be worse, but lowering my car payment will help a bit. didn't plan on getting knocked up, had i known i was pregnant when i was in the process of buying my car, i may have done differently. i'm looking into transferring to a credit union.

I understand what you are saying my dear, I have been there. But what does the government have to do with it?

Interest rates are the lowest they have been in 10 years...and have been for a long time, provided your credit is decent. I made mistakes and paid the price, and the government had absolutely nothing to do with it.

[Lula]

well wth do i know!? i blame the economy.... everything is expensive and it sucks i'm like mccain, i don't know much about the economy

[RossValoryRocks]

well wth do i know!? i blame the economy.... everything is expensive and it sucks i'm like mccain, i don't know much about the economy

Neither does Obama...he just isn't being honest...that's why they both have economic teams (both of which are stocked full of lobbyists, Obama just beat McCain to the punch on the issue)

[Enigma869]

Interest rates are the lowest they have been in 10 years

Dude...you sound like a politician with the shit you just pull out of your ass! What exactly is it that you're suggesting "interest rates are the lowest they have been in 10 years" on???? I can tell you that if you're speaking of home mortgages, you couldn't be more wrong. I've owned a mortgage company for many years, and I can say that your statement is unequivocally false, and ridiculous! You sound like Puppet Palin on the stump, saying shit that simply isn't true!

This is just another example of you attempting to paint this perfect picture of the U.S. economy. The only problem is that most people are going to believe their eyes over your rhetoric!


John from Boston

[7 Wishes]

To be fair, McCain has 66 lobbyists while Obama has 3.

However, Barack has 7 of those loser tree-stump-crying hippies on his team. McCain has none.

[RossValoryRocks]

Interest rates are the lowest they have been in 10 years

Dude...you sound like a politician with the shit you just pull out of your ass! What exactly is it that you're suggesting "interest rates are the lowest they have been in 10 years" on???? I can tell you that if you're speaking of home mortgages, you couldn't be more wrong. I've owned a mortgage company for many years, and I can say that your statement is unequivocally false, and ridiculous! You sound like Puppet Palin on the stump, saying shit that simply isn't true!

This is just another example of you attempting to paint this perfect picture of the U.S. economy. The only problem is that most people are going to believe their eyes over your rhetoric!


John from Boston

I never said it was perfect. It is not as bad as you liberals would paint it. Neither is it as robust as the extreme right would paint it.

And yes mortgages are as low as they have been in years...I just bought a new house and got a 5.65% rate...but I have good credit. Car loans are in the 4's if you have good credit. So you are just showing how truly ignorant you are, or are so far removed from you mortgage days you are no longer paying attention.

[slucero]

wow...

http://www.cnbc.com/id/15840232?video=859239606&play=1

[Enigma869]

I never said it was perfect. It is not as bad as you liberals would paint it. Neither is it as robust as the extreme right would paint it.

And yes mortgages are as low as they have been in years...I just bought a new house and got a 5.65% rate...but I have good credit. Car loans are in the 4's if you have good credit. So you are just showing how truly ignorant you are, or are so far removed from you mortgage days you are no longer paying attention.

You are a fucking moron! These comments prove once again that you're not half as fucking brilliant as you claim to be, in every post! I can assure you that I am not "removed", AT ALL from my mortgage days! I've been in the industry forever, and still work 60 hours a week in the industry. The average overnight 30 year fixed rate mortgage as of today is 5.83%, and that rate is only available to people who have absolutely FLAWLESS credit! That is a fact! I personally closed 25 mortgages in April of 2004 for a 4.99%, 30 year fixed, which in case you can't figure out the math, is almost one full point lower than where rates currently are! The Fed funds rate is presently 2%. From December of 2001 all the way through September of 2004, the Fed Funds rate was below 2%! That is a fact! The average new car loan rate as of right now for a 5 year note is 6.51%. The only car loan you're finding "in the 4's" is one that would be 4.99%, and you're only getting that rate through a local credit union, and if you can pay your note off in 3 years or less, with an 800 credit score! While I certainly agree that rates are not very high right now, from a historical perspective, I can tell you, as someone who sees this stuff everyday, that loans (of all varieties) are MUCH more difficult to get. The reality is that people with 720 FICO scores are now seeing rate increases, due to less than perfect credit scores. Last year, people with credit scores over 700 were given rate deductions for having great credit scores! While you may have an 800 credit score, that doesn't change the fact that less than one half of one percent of the population has a credit score anywhere near that high! The average credit score in the U.S. is between 650 and 680, depending upon whose data you believe!


John from Boston

[Enigma869]

wow...

http://www.cnbc.com/id/15840232?video=859239606&play=1

Right, and even with the Dow at its lowest level in 3 years, that blowhard Stu will still say "Hey, everything is fucking great. I have the highest credit score on the planet, and the bank is giving me money at 2%." Then he'll go on to say "Nobody should believe any economist. I am the authority on the U.S. economy. Believe me, the almighty Stu, who worships that dope Ross Valory, and not your lying eyes"


John from Boston

[RossValoryRocks]

wow...

http://www.cnbc.com/id/15840232?video=859239606&play=1

Right, and even with the Dow at its lowest level in 3 years, that blowhard Stu will still say "Hey, everything is fucking great. I have the highest credit score on the planet, and the bank is giving me money at 2%." Then he'll go on to say "Nobody should believe any economist. I am the authority on the U.S. economy. Believe me, the almighty Stu, who worships that dope Ross Valory, and not your lying eyes"


John from Boston

What an antagonistic cocksucker you are. You call me a blowhard? I was, after reading the post just above the one quoted her, going to say "you know John you are right, and I am wrong. Especially after reading and watching some top flight economist take on this whole thing late last night" but now I am just going to tell you what a dick you are. You are easily the most hostile person I have ever had the displeasure of interacting with.

You talk about me saying that I am always right, have you ever gone back and read the stupid shit YOU post?